Nifty Options Vertical Spread Trading

[godfather]

ananths, May this website will be help full http://www.theoptionsguide.com/option-trading-strategies.aspx pls have a look on it ...

 

[ananths]

@TR,
"how can we overtrade with these, one trade will take around 1 week, so only 4-5 trades per month......" just the quote from your thread.

It happens here also...for example I used to overtrade earlier..whenever we see some profit/loss we tend to remove the spread or will find something better..instead we should try to adjust the current spread risk. Now I have limited myself to 4-5 spread trades per month max with adjustments whenever required. So i play only with 50% of capital.
However trading with the trend gives more returns and less trades..

 

[pakatil]

Now 50 point strikes available in NIFTY its great benefit for spread traders...you can get pair with 15-20 points risk now and can do day trading or short term trading with minimum risk and if there is 50 points move in nifty it can generate 5-10 points per lot.

Vols in 50 pt strikes seems pathetically low.

 

[gmt900]

Now 50 point strikes available in NIFTY its great benefit for spread traders...you can get pair with 15-20 points risk now and can do day trading or short term trading with minimum risk and if there is 50 points move in nifty it can generate 5-10 points per lot.

ananth,
I just went through your entire thread. Since I used to think that spread trading does not have good profit potential, I did not look at it seriously earlier. However I now realise that this is a better strategy for good R/R ratio.Especially with 50 point strike price difference for nifty, spread trading will have even better R/R ratio. It's better to try simple strategies ( and improvise) than try exotic stuff . Will follow your thread.
Thanks and regards,
gmt900

 

[ananths]

ananth,
I just went through your entire thread. Since I used to think that spread trading does not have good profit potential, I did not look at it seriously earlier. However I now realise that this is a better strategy for good R/R ratio.Especially with 50 point strike price difference for nifty, spread trading will have even better R/R ratio. It's better to try simple strategies ( and improvise) than try exotic stuff . Will follow your thread.
Thanks and regards,
gmt900

Hi gmt900,
Yes. You are right....we need to improvise it to reduce the risk for example selling OTM calls/puts. I tried this few times and it worked well. Say we have bot 6000/6100 spread, we can sell 6050ce for few points to cover the spread risk.

You may post your trades here...and we all can learn together :thumb:

 

[ananths]

Spread trade #2 bot on 11/08/2013

Bot 6000CE/6100CE at 92/55 Difference = 37

Current status :

6000CE/6100CE at 95/54 Difference = 41

P/L = +4 points.

Will hold this position as long as Nifty stays above 5900. :thumb:

 

[ananths]

Spread trade #2 bot on 11/08/2013

Bot 6000CE/6100CE at 92/55 Difference = 37

Current status :

6000CE/6100CE at 95/54 Difference = 41

P/L = +4 points.

Will hold this position as long as Nifty stays above 5900. :thumb:

Covered short call 6100CE @ 22
Sold 6050 @ 37

Current status
6000CE 92 (47) = -45
6100CE 54 (22) = +32 (closed)
6050CE 37 (33) = +4

Net P/L = -9 points

 

[ananths]

Covered short call 6100CE @ 22
Sold 6050 @ 37

Current status
6000CE 92 (47) = -45
6100CE 54 (22) = +32 (closed)
6050CE 37 (33) = +4

Net P/L = -9 points

Position at COP
Long 6000CE 92 (52) = -40
Short 6050CE 37 (38) = -1
Closed 6100CE. = +32

Net P/L. = -9 points

5800PE and 6000CE has highest OI....if market goes below 5800...will cover the spread.

 

[ananths]

Position at COP
Long 6000CE 92 (52) = -40
Short 6050CE 37 (38) = -1
Closed 6100CE. = +32

Net P/L. = -9 points

5800PE and 6000CE has highest OI....if market goes below 5800...will cover the spread.

Dt - 17/09/2013

Another boring day in market..not much to do.

Position at COP

Long 6000CE 92 (55) = -37
Short 6050CE 37 (39) = -2
Closed 6100CE. = +32
Net P/L. = -7 points

 

[narayan78]

ananth bahi,

any update today.